SG – UK: Better tone in the data releases

jun 22, 2012

Minute Read

Retail sales ex auto fuels bounced 0.9% mom in May after a fall of 1.1% in April. The CBI Industrial Trends survey reported increases in both orders and output components in June….

Economics Daily – Société Générale

The information and any advice contained herein is directed only at, and made available only to, professional clients and eligible counterparties (as defined in the FSA rules)

The weather hurt retail sales in April and in early May but then, as the sun finally came out later in May, sales finally bounced. Sales ex auto fuels rose by 0.9% mom after a fall of 1.1% mom.

The weather returned to the normal UK spring, i.e. rain, in June and so we expect renewed weakness in the June numbers. Nevertheless, the underlying upward trend should remain in place, given the stabilisation in real disposable income taking place as a result of the falling trend in inflation.

The CBI Industrial Trends survey was much stronger than expected. Orders rose from 17 to 11 in June and output rose from 3 to 7. The output number is still well below the figure of 24 seen in March and April so is not indicative of firm output growth. We thought the May figures were misleadingly weak but, after the surprise fall in April manufacturing output, we expected the weakness to continue.

It is still difficult to expect any significant manufacturing output growth against such a weak European backdrop, though. Export orders bounced from 12 to 4 but that might have been driven by countries outside Europe.

Source: ETFWorld – Société Générale

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